2026-VIL-1271-CESTAT-BLR-CU
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CUSTOMS CESTAT Cases

Customs - Valuation - Appellant imported PVC profile and other goods from China at declared values. During investigation of alleged mis-declaration regarding freight charges, invoices reflecting higher values were recovered during search and the Director admitted to declaring lower values for certain consignments while actual invoices received from overseas suppliers showed higher prices - Whether rejection of transaction value declared by Appellant and demand for differential duty based on invoices recovered during investigation and statements recorded from the importer is sustainable - HELD - The evidence on record including invoices recovered during investigation established higher values than those declared and the statement recorded from the Director confirmed that goods were intentionally undervalued. The declared transaction value was properly rejected as the invoices recovered during investigation reflected the true prices of goods at the time of removal and the assessable value based on the actual invoices recovered represents the true transaction value under the Customs Valuation Rules read with Section 14 of the Customs Act. The rejection of declared value and determination of assessable value based on invoices recovered and admissions made by the importer is sustainable and in accordance with law - Demand for differential duty against undervalued imports is upheld and goods are liable for confiscation. Redemption fine is reduced to amount calculated at ten percent and penalty reduced to amount calculated at five percent of the enhanced value of goods cleared under the Bills of Entry – Ordered accordingly - Confiscation and Penalty in Provisional Assessment - Goods imported were provisionally assessed and provisionally released in April 2014. Subsequently show cause notice was issued under Section 28 of Customs Act for finalization of provisional assessments proposing confiscation and penalties alleged to be undervalued based on comparison with values of petroleum products imported during different periods and at different specifications - Whether confiscation and penalties can be imposed under Section 28 when goods are only provisionally assessed and assessment is not finalized - HELD - Allegations of mis-declaration, suppression of facts and non-payment or short payment of Customs Duty arise only after finalization of assessments and adjustment of duty paid or payable under Section 18(2) of Customs Act. Section 28 can be invoked only when duty has not been levied or has been short-levied following final assessment. There is no legal justification for issuance of show cause notice under Section 28 for finalization of provisional assessments as only the Proper Officers have jurisdiction to finalize provisional assessments - The comparison using prices of petroleum products from different periods for determining value is unsustainable as petroleum products have varying prices depending on international petroleum price fluctuations - The impugned order proposing demand, confiscation and penalties based on enhanced value in provisional assessment is set aside. The demand, confiscation and penalties imposed on Appellant and CEO are set aside. Jurisdictional Proper Officer is directed to expeditiously finalize the provisional assessments in accordance with law.
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